Question

Statement of Shareholders' Equity Example: Stanley, Inc. reported the following information for the year of 2016: Stanley is a calendar year corporation. Net Income of $120,000 Declared and paid a cash dividend of $10,000 Unrealized loss on AFS Securities of $60,000 The company issued 1,000 shares of common stock for $20 per share • Stanley reported the following account balances at January 1, 2016 (beginning of year): Common Stock, $5par Additional Paid-In Capital, common stock Accumulated Other Comprehensive Income Retained Earnings $ 30,000 320,000 80,000 90,000 Required: Prepare a statement of stockholders' equity. APIC-C AOCI Total Common Stock 30,000 Retained Earnings 90,000 320,000 80,000 520,000 Balance 1/1 Net Income Dividends Unrealized loss on AFS Issued CS Balance 12/31 Entry to record issuance of common stock during 2016: Date Account Description Debit Credit

Answer 1

Statement of stockholder's equity:

	Common Stock	APIC-C	Retained Earnings	AOCI	Total
Balance 1/1	30,000	320,000	90,000	80,000	520,000
Net income			120,000		120,000
Dividends			-10,000		-10,000
Unrealized loss on AFS				-60,000	-60,000
Issued CS	5,000	15,000			20,000
Balance 12/31	35,000	335,000	200,000	20,000	590,000

Journal Entry to record issuance of common stock:

Date	Account title and Explanatoin	Debit	Credit
During 2016	Cash [1,000 x $20]	$20,000
	Common stock [1,000 x $5 Par]		$5,000
	Additional paid-in capital-Common stock		$15,000
	[To record issuance of common stock]